Axar Capital Management LP agreed to acquire remaining 25.4% stake in StoneMor Inc. (NYSE:STON) for approximately $110 million on May 21, 2022. Axar Capital Management LP entered into a definitive merger agreement to acquire remaining 25.4% stake in StoneMor Inc. on May 24, 2022. Axar will pay $3.50 in cash per StoneMor share. StoneMor received equity commitment from Axar and its affiliates to fund with $98,000,000 to satisfy the payment obligations at closing. The agreement provides for a ôgo-shopö period during which the Conflicts Committee (acting through its financial advisor) will actively initiate, solicit, facilitate, encourage and evaluate alternative acquisition proposals, and potentially enter into negotiations with any parties that offer alternative acquisition proposals. The ôgo-shopö period is 60 days subsequent to signing of the Merger Agreement, ending July 23, 2022. As on June 3, 2022, StoneMor Inc. Commences Go-Shop Process in accordance with merger agreement. StoneMor will pay Axar a termination fee in certain circumstances, including a fee equal to 2% of the aggregate value of the non-Axar shares if StoneMor terminates the agreement during the ôgo-shopö period to enter into a superior proposal that Axar supports, and a fee equal to 4% of the aggregate value of the non-Axar shares if StoneMor terminates the agreement after the ôgo-shopö period to enter into a superior proposal that Axar supports. No termination fee is payable if StoneMor terminates the agreement upon a change of recommendation in connection with a superior proposal that is not supported by Axar. This will amount to $2.1 million and in certain cases $4.2 million. If the transaction is completed, StoneMor will become a privately held company and its stock will no longer trade on the New York Stock Exchange. In addition to Andrew Axelrod, each of Spencer E. Goldenberg, David Miller and Joseph M. Redling will become directors of the Surviving
Company in connection with the closing of the Merger and StoneMor intends to appoint Lilly Donohue to succeed Joseph M. Redling as President and Chief Executive Officer of the Surviving Corporation.
The merger is subject to approval by holders of a majority of the outstanding common stock of StoneMor and in addition, requires the approval by the holders of a majority of the outstanding common stock of StoneMor not owned by Axar or any of StoneMorÆs directors or executive officers or members of their immediate families. Axar has agreed to vote the shares of StoneMor common stock it owns in favor of the merger agreement. The merger agreement is also subject to customary closing conditions. Axar has fully committed financing and the transaction is not subject to a financing condition. The transaction was negotiated on behalf of StoneMor by the Conflicts Committee of its Board of Directors, which is comprised entirely of independent directors, with the assistance of independent financial and legal advisors. Following the Conflicts CommitteeÆs unanimous recommendation, StoneMorÆs Board of Directors approved the merger agreement and has recommended that StoneMorÆs stockholders adopt and approve the merger agreement and the merger. At a meeting held on May 21, 2022, the Conflicts Committee approved the Merger Agreement. Board of directors of Axar also approved the merger agreement. The shareholders meeting of StoneMor is scheduled on November 1. 2022. As of November 1, 2022, the shareholders of StoneMor has approved the transaction.
Subject to satisfaction of the conditions to closing, the transaction is currently expected to close in the fall of 2022. Duff & Phelps, now rebranded as Kroll, is serving as financial advisor and Elizabeth A. Diffley of Faegre Drinker Biddle & Reath LLP is serving as legal counsel to the Conflicts Committee. Houlihan Lokey is serving as financial advisor and Stuart D. Freedman and Jeffrey Symons of Schulte Roth & Zabel LLP is serving as legal counsel to Axar. Thomas G. Spencer of Duane Morris LLP is serving as legal counsel to StoneMor Inc. Kroll, LLC also acted as fairness opinion and due diligence provider and to the Conflicts Committee. American Stock Transfer & Trust Company, LLC acted as transfer agent and MacKenzie Partners, Inc. acted as information agent to StoneMor Inc. Daniel F. Spies and Brien Wassner of Sidley Austin LLP acted as legal advisor to Axar Capital Management LP.
Axar Capital Management LP completed the acquisition of the remaining 25.4% stake in StoneMor Inc. (NYSE:STON) on November 3, 2022. As a result of the transaction, StoneMor notified the NYSE and requested that (i) trading of Common Stock be suspended prior to the opening of trading on November 4, 2022 and (ii) the NYSE file with the SEC a notification of removal from listing on Form 25 in order to delist the Common Stock from the NYSE and deregister the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the ôExchange Actö). Stephen J. Negrotti, Kevin D. Patrick and Patricia D. Wellenbach ceased to be directors of StoneMor post deal completion.